Analysis: How does "Yi Er San" operate its products?

Yiersan is a clothing rental platform for women and a shared wardrobe for women. This article analyzes Yi Er San from the perspective of product operation . Let’s take a look~

1. Product Background

1. Product Introduction

While people are hotly discussing Pinduoduo's consumption downgrade and the future of social e-commerce , there is actually a company that is reducing consumption in the name of consumption upgrading. This company is Yiersan, which uses shared wardrobes to allow women to get high-quality clothing experiences at a low cost.

Yi'ersan's subscription membership system provides daily rental of branded fashions for urban white-collar women. Members only need to pay a monthly fee to wear tens of thousands of fashions an unlimited number of times on the Yi'ersan platform. In short, it is sharing clothes.

2. Product positioning

Provide a clothing rental platform for women.

Scenario 1:

• User: Urban white-collar worker
• Demand: I want to wear better clothes to attend a party with friends
• Pain point: The dress is too expensive and it’s a waste to wear it once

Scenario 2:

• User: Business Newbie
• Need: Need to face customers frequently, want to dress formally
• Pain point: Not having enough professional attire to meet clients

Scenario 3:

• User: Mid-level employees
• Demand: Want to dress differently every day and look professional
• Pain point: I don’t have enough money to buy too many clothes, and the wardrobe can’t be that big.

3. Product business logic

Core business logic

First, there are two paths for users:

• One is to rent clothes and return them after renting;
• Another way is to buy it after renting it. You can buy it before returning it, or you can buy it after you return it. If you like it, you can buy it and have it delivered. This fully guarantees user experience and service quality.

4. Product Architecture

Product functional architecture

From the product architecture, we can see that Yiersan still revolves around clothing display, user attention, clothing selection, ordering, receipt, photo sharing, and returns this core user main process to build a functional architecture.

5. Product Events

• In January 2015, Beijing Shangshixiaozhong Technology Co., Ltd. was established;
• In April 2015, Jiuwu website was launched;
• In December 2015, the Jiuwu brand was upgraded to Yiersan;
• In April 2016, Yi'ersan received tens of millions of US dollars in A+ round financing ;
• In March 2017, Yi'ersan received US$20 million in Series B financing;
• In September 2017, Yi'ersan received US$50 million in Series C financing, led by Alibaba , Softbank China, and Sequoia China, and followed by old shareholders such as GSR Ventures, IDG Capital, Panlin Capital, angel investor Wang Gang, Zhizhuo Capital, Zhen Fund, and UVM. After receiving investment from Alibaba , Yi'ersan obtained cooperation from Ant Credit .

4. Stage Analysis

Based on the major events of Yi'ersan, we can see that Yi'ersan is still in its growth period, so Yi'ersan is divided into two stages, with the focus on the second stage.

• The first phase of exploration: 2015.1-2016.12
• The second growth phase: 2017.1-2018.8

Phase 1: Exploration

product:

1. In terms of product entry point, Yiershang did not initially start with monthly clothing rentals. Later, we started a monthly membership service, which increased the frequency of clothing rentals and the circulation of clothes.
2. The business model has changed from short-term rental of dresses to monthly subscription for regular dresses. Chinese women have less demand for clothing for special occasions, and dress rental is a high-end, low-frequency demand. However, women wear different clothes every day, so casual clothes are a higher-frequency demand.
3. The service of the product is polished to ensure the cleanliness of the clothes. First of all, the laundry factory ensures that the water washed out is drinkable.
4. On the other hand, we built our own ERP system to manage the location of goods. At the same time, through the analysis of user order and return data, we can predict and plan the time for goods to enter and leave the warehouse in advance.

operations :

At this stage, Yi'ersan mainly focuses on supply chain and brand building.

1. Ensure the supply of clothes, focus on building the supply chain, and collect global brand clothes through buyers.
2. Use content marketing to drive product rental rates.
3. Try to push more clothes to users in a digitized way, or even in an intelligent way, and work and optimize in the direction of tailor-made clothes for each individual, so that clothes can be matched with users as accurately as possible and users can choose clothes in a very short time.

Stage summary:

At this stage:

1. The first is to determine a more frequent monthly payment, so that users will spend money painfully once, and then there will be continuous surprise benefits later, thus capturing the psychology of consumers.
2. It is to shift from formal wear to casual wear and increase the frequency of user usage.
3. On the one hand, Yiersan has set a quantity threshold of "only 3 items can be selected at a time", which imposes certain restrictions on users to ensure the circulation of its products.

Phase 2: Growth

product:

1. In terms of products, a deposit-free service was launched for customers with Ant Credit scores of 650 or above, and the number of new users increased by 138%.
2. Develop Alipay mini program . Yi'ersan chose the Alipay platform and also gained support from various resources including traffic .
3. At this stage, Yi'ersan's products had passed the P/MF stage, and then carried out a series of content marketing to promote user growth.

operations:

At this stage, Yi'ersan mainly focuses on marketing and growth.

1. Story Marketing: Uses exaggerated expression techniques to tell the story of an office girl, Vivian, who stands out at critical moments (interview, competition with colleagues, meeting clients with the boss, and finally meeting senior executives at a company cocktail party, where she meets a tall, rich and handsome man) because of her decent dressing, and is promoted all the way to the pinnacle of her life.
2. Yi Er San also produced an interactive H5 called "Fashion Bizarre Talk ", using the form of debate to amplify the controversy. This has attracted debaters from "The Rap of China", hip-hop singers from China, start -up investors , emotional bloggers, and supermodels to join the battle. Fans can not only listen to the sharp opinions of celebrities, like or diss them, but also record their own videos and upload them to H5 to interact and compete with them.
3. In terms of event operation , we also cooperated with the brand’s voice to launch the activity of "Buy a card and win Prada, Yiersan will give you the secret weapon in the workplace".
4. Growth mechanism: Users are segmented into core users (registered and continuously paying), registered but not paying, and churned users, and tiered operations are performed. For core users, we strive to get them to bring in new users. For example, both parties who are invited can receive a 50-yuan voucher and a 7-day trial card. As for lost users, we find out the reasons for their loss, strengthen guidance in a targeted manner, and give red envelopes of 200 yuan to new registered users.

Stage summary:

In terms of content, Yi Er San aroused users' interest through storytelling and used humorous narrative methods to reduce the sense of conflict caused by innovative concepts. In terms of communication, it captures topics of interest to the new middle class and expands the video's dissemination by setting topics.

The product’s scenario-based positioning targets middle-class urban working women, firmly grasps the topic of working women and establishes a brand among working women. During this stage, Yi'ersan experienced crazy growth in the market and built its own growth engine, integrating user analysis and tiered operations.

It has far surpassed its competitors in terms of growth, but because it has grown too fast, many users have complained about problems with the clothes online. After the market stabilizes, what Yiersan needs to do is to carry out refined operations and ensure service quality.

V. Analysis and Conclusion

For Yi'ersan, how to judge the validity of this business logic? First of all, Yi'ersan's CEO said that his platform has achieved profitability, 30% of which comes from selling clothes. Based on the establishment of this business logic, let’s take a look at Yi Er San’s future business growth capabilities.

(1) Growth in rental membership

First of all, the number of white-collar workers in first- and second-tier cities is limited. Secondly, the conversion rate of white-collar workers is also limited. So if you want to achieve sustained growth, there are two ways to do it: one is to expand the population, and the other is to expand the product categories.

So first let's look at expanding the population. There are two possibilities for expanding the population:

• First, expand the different scenarios and identities of the same group of people. For example, a white-collar worker in the workplace may be a mother at home on weekends.
• The second is to expand the access scenarios for different groups of people. In this case, it can move down to third- and fourth-tier cities. However, it is unknown whether this opportunity is in line with Yiersan’s positioning, and whether people in third- and fourth-tier cities will accept the concept of renting clothes.

In short, the first possibility is more likely.

(2) Growth in clothing sales, starting from experiential e-commerce

This business logic involves two issues: one is the price of clothes, and the other is people's willingness to buy.

Starting from the first point, can the middle class accept the first-hand price of second-hand clothes? The answer is definitely no. As for the second-hand price of second-hand clothes, the premise that Yi Er San can accept the loss is that the income from renting out the clothes before + the selling price > the purchase price of the clothes.

The second option is to directly act as a brand middleman and engage in B2C e-commerce. This is undoubtedly the same as the model of the e-commerce platform. In this case, you will become an enemy of the investor Alibaba. Secondly, acquiring user traffic becomes very important, which is definitely difficult to do.

(3) Making money from data

Since most of the people in the clothing industry are high-value white-collar workers, by analyzing the consumption habits of this group of white-collar workers, we can provide more advertising services and provide more brand advertising cooperation. This is also a good way to make money. It is also possible to tap into other services. By age, we can tap into the campus market , and by age, we can tap into the maternal and infant market.

summary

When the online bonus disappears, all companies are looking for new traffic. Yiersan can tap into deep user value from existing inventory, generate value from data, and thus find more profit points.

The second is to build high walls. Yiyiyi originally entered the market with a disruptive product, which brought in orders and users. As the order scale grew, it needed to further improve the back-end supply capabilities of the product. On the premise of providing good front-end user services and keeping up with the back-end service quality, it was necessary to build its own upstream supply chain. When the supply chain was able to change, it would in turn empower the front-end products.

Source: Feng Yiyun